- InfraCo Africa, the Danish Investment Fund for Developing Countries and the EU-funded Electrification Financing Initiative have together committed US$15.5m to enable Africa GreenCo (GreenCo) to scale its innovative offering as Zambia’s first renewable energy buyer and services provider.
GreenCo’s Lusaka-based company, GreenCo Power Services was established in 2020 with support from IFU and InfraCo Africa (through its sister company, PIDG Technical Assistance). GreenCo’s model involves purchasing power from renewable independent power producers (IPPs) and selling that electricity to utilities, private sector offtakers (i.e. commercial and industrial users) and competitive markets in the Southern African Power Pool (SAPP).
GreenCo’s model mitigates the risk of purchaser default through an ability to secure alternative buyers or through short-term trading on the SAPP electricity markets.
Related news: Zambia defaults economically and politically
The monies raised will provide GreenCo with working capital and the Liquidity Buffer necessary to support a portfolio of up to 110MW of renewable energy, the company said in a statement.
The Zambian Minister of Energy Hon. Peter Chibwe Kapala, MP, welcomed this investment saying, “GreenCo Power Services Limited is the first Intermediary Power Trader in Zambia following the enactment of the 2019 energy sector legal framework. GreenCo introduces to the Zambian electricity market a creditworthy buyer of renewable energy generated from IPPs. The entry of GreenCo on the Zambian electricity market signifies Government’s commitment to create a conducive environment that will attract private investments in an open, transparent and competitive electricity market. This investment will support Zambia’s development of a greener and diversified energy mix: one that creates jobs and new business opportunities, whilst at the same time positioning Zambia as the region’s power trading hub.”
In its first 12 months of operation, GreenCo has been accepted as the first member under the Market Participant category and the first new member of the Southern African Power Pool (SAPP) since 2018. GreenCo has awarded its first power purchase agreement tender to a 25MW pilot solar facility in Sesheke in the country’s Western Province. It has also negotiated a power purchase agreement with a large hydro facility to purchase and sell the plant’s excess generation.
Author: Bryan Groenendaal